go through Revin Mikhael D. Ochave, reporter
Philippine stocks could get a boost this week if the country is ahead of U.S. tariff talks with trading partners.
“PSEI reflirted to reach 6,500 areas despite supply pressures following a slight increase in inflation in the Philippines in June,” said online broker 2tradeasia.com in the market notes.
Philstocks Financial, Inc. Japhet Louis O. Tantianco, research manager, said positive developments ahead of the tariff deadline could boost investor sentiment.
“The extension of the established trade agreement or negotiation deadline between the United States and the Philippines may have a boost to the market,” he said in a Viber message. “Next week, market sentiment will be cautious as investors await the trade agreement.”
On Friday, the Philippine Stock Exchange Index (PSEI) fell 1.13% or 73.41 points to close at 6,395.57 points, while the broader fully shared index fell 1.01% or 38.62 points to 3,764.71. One week a week, PSEI fell by 0.2% or 12.7 points.
U.S. President Donald J. Trump said on July 4 that he had signed letters from 12 countries containing proposed tariff levels that would be deemed to be “accepted or left it.” He did not name the country.
In April, the United States suspended planned reciprocity tariffs for 90 days, with a deadline of July 9. The 10% tariff on blankets is still in effect, but Mr. Trump warned that tariffs could be as high as 70%, with most tariffs coming into effect on August 1.
Mr Tantiangco said Bangkok Sentral Ng Pilipinas (BSP) could support the market after higher inflation rates in June.
The Philippine Statistics Bureau reported that inflation rose to 1.4% in June from 1.3% in May due to higher prices in the utilities and education sectors. The interest rate is still below 3.7% in June 2024, with the central bank’s forecast of 1.1% to 1.9%.
BSP Governor Eli M. Remolona (Jr. In May, BSP lowered its target reverse buyback rate by 25 basis points to 5.25% due to inflation outlook and beyond expectations for the first quarter economic growth.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., in an email, placed direct primary support for PSEI from 6,105 to 6,200 and resistance of 6,500.
2tradeasia.com immediately supports 6,300 with resistance of 6,500 to 6,550.
“Although the broad reassessment is still limited by global uncertainty, we emphasize that local fundamentals are more constructive than their global counterparts,” the broker said.
It added: “The ongoing BSP easing, while reducing local borrowing costs, also highlights the potential opportunities for foreign capital to bring to Philippine securities, which could spill over into high-quality stocks.”
It says the best way to find strong investment opportunities is to analyze individual companies. However, as the cost of borrowing is changing and the economy is growing cautiously, it may make sense to slowly start buying stocks.
Mr Tantiangco said PSEI may continue to test the 6,400 level.
“From the chart, the local market closed the 6,400 line last week after failing to hold its exponential moving average (EMA) that exceeded its 200-day,” he said.
He said this shows that the market is still working to surpass key levels, adding that it may try again over 6,400. If it fails, it may drop further to a new level where support may be found.
